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May 2015

[2015] (37) STR 377] (Tri.-Mumbai) GTL Infrastructure Ltd. vs. Commissioner of Service Tax, Mumbai

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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CENVAT credit is admissible on towers and cabins used as Passive Telecom Infrastructure for providing output service.

Facts:
Appellant is engaged in creating “Passive Telecom Infrastructure” to be used by Cellular Telecom Operators to provide their “Cellular Telephony Services” and the operations and maintenance thereof, taxable under business auxiliary services. Department objected to availment of CENVAT credit on the parts of Towers, Cabins etc. used for providing Passive Telecom Infrastructure.

Held:
The Tribunal observed that Rule 2(k)(ii) of the CENVAT Credit Rules,2004 is relevant as the Appellant id providing output service and Rule 2(k)(i) of the CENVAT Credit Rules,2004 and the Explanation-2 to the said rule are not relevant as it deals with manufacturing. The Appellant is providing a Business Auxiliary service to the cellular operators by creating a passive infrastructure for the transmission of signals and by virtue of Rule 2(k)(i) which allows CENVAT credit on all goods, except petrol and motor vehicles, used for providing any output service, the CENVAT credit is allowed.

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